Senators are dominant

[GSmith]

The Senators have been dominant in their 2 wins. They started rough against the Jets but took over as the game went on.

Last night they dominated the Panthers and if it wasn't for Theodore they would've won 6 or 7-0. It will be interesting to see how they play in Florida in back to back games. Florida will get them on the 2nd night so it will be interesting to see how they play.

Anderson, who was the question mark seems to be in mid-season's form which is a good sign. In the back to back games coming up, Anderson will start in one of them. Who will start in the other?

[williamefwilson]

Yes, now if only their fans would show up whenever the Leafs or Habs are in town...

[GSmith]

Well once the schedule is put up, Leafs fans grab as many as they can. Most can't get tickets to see them play in Toronto because the season's ticket holders have them all and the regular Joe can't get one. That and the fact that its too expensive, so they flock to Ottawa when they can.

[williamefwilson]

Excuses, excuses... Don't see Sens fans scoop-up tickets at the ACC. Just not the same drive (and I'm not referring to the drive between Toronto and Ottawa).

[GSmith]

Last time I checked Toronto was 6X bigger than Ottawa, that means they have 6X the market size and fan base so its only natural there will be that many more fans coming one way as compared to the other.

Also, supply is limited with 6million people in Toronto vieing for the 20,000 seats. If Ottawa were 6 times bigger you wouldn't even be able to buy a ticket to an Ottawa game because they would be sold out every game. As a matter of fact if you take a look at the attendance statistics the Senators are 5th in the NHL, just ahead of Toronto. http://espn.go.com/nhl/attendance

So why would an Ottawa fan want to drive all the way to Toronto to see a game when we can do it in our own back yard?

[williamefwilson]

I'm not sure what you're saying here. On the one hand, you're arguing Ottawa is a smaller market so there's naturally less demand for Senators tickets. Thus, Leafs fans can buy these tickets to compensate for the fact demand is much higher in Toronto. On the other hand, you're arguing that Ottawa has better attendance figures versus Toronto for the current season (based on 4 home games for the Sens, 3 home games for the Leafs by the way...), which would imply the opposite: that Sens fans should be driving to Toronto so that they can watch their team.

Here's what I know:

1) Total population size is not indicative of fan support. Otherwise, smaller market teams (based on the population of the home city and surrounding area) like Pittsburgh, St. Louis, Calgary, Winnipeg, etc., would not survive. A strong fan base can exist without trouble in a relatively small city and surrounding area. Here the passion and commitment levels of fans are key to survival, not overall population size. (Ottawa, for the record, is bigger than all of those cities. It can also draw upon larger surrounding areas than the two Canadian cities.) Similarly, teams located in large American cities like the Kings, Islanders and Stars can struggle at times to put people in the seats.

2) Leafs fans will make the drive from Toronto to Ottawa, not vice versa, speaking to their stronger levels of passion and commitment. The same applies for fans of les Habs. This is why you see more Leafs fans or Habs fans in attendance whenever the two teams visit Ottawa - a point that stands true whether you want to argue Ottawa is too small of a city to fill its own arena or one of the best cities in the NHL for attendance. If Slap Shot has taught the hockey world anything, it's that Booster Clubs and die hard fans will follow their team anyway notwithstanding the ticket situation at home.

3) You cannot look strictly at the numbers behind any "supply and demand" argument since they really only speak to the supply side of the equation. You must also factor demand into the calculation - how much are people willing to spend, how far are they willing to travel, etc., for something. As your second argument above notes, there's plenty of supply in Ottawa from both the consumer perspective and the business perspective (i.e. sillies who will pay for Sens tickets), but it's the demand part - that intangible, human desire to own something, belong to something, etc. - that is insufficient. This explains lower ticket prices in Ottawa, which is different from lower ticket sales, and why Leafs fans and Habs fans dominate the Scotiabank Place whenever their respective teams visit town: they'll go the extra mile to show their support.

4) One day, when the Greater Toronto Area grows to eventually include Ottawa, you'll see higher levels of fan support in the area. Sadly, of course, they'll be wearing and cheering the Blue & White.

[GSmith]

Spoken like a true Leaf's fan William. Well done. As a certified general accountant I know a thing or two about supply and demand. Here's what you fail to realize:

1. Small market size does matter. That's why the NHL now has a cap. In the 2004 work stoppage, one of the main arguments was the NHL protecting its small market franchises. Franchises that have small market bases and thus less revenue, could not compete with larger market teams that can buy the better players. We see this happening in baseball where the franchises like the New York Yankees, are almost always on top while the small market teams like the Kansas City Royals cannot compete. Without arguing for our respective cities, just think, if a city has 6 million people and the other 1 million it stands to reason that they would have 6 times the fans and 6 times the demand. So yes, size of a market does matter, that's why NHL pundits categorize Ottawa, Calgary, Edmonton and Winnipeg as small market teams.

2. Your right Leafs fans will make the trip to Ottawa, but a big reason is because they cannot get tickets in Toronto. In fact, a population of six million vieying for 20,000 seats doesn't give you much of a chance. That's why there is so much talk about a 2nd NHL team going into the Toronto market, with Markham being the number 1 possible venue. The supply of tickets in toronto and ottawa is the same, however the demand is about 6 times bigger in Toronto, that's simple economics, not fan passion.

3. Some of your argument is true, however as an accountant I can tell you that higher demand means higher prices in anything. The more the demand the higher the price for the product. That's why you see ticket prices in the larger markets being much higher. It's simply a product of demand.

As for the Toronto and Montreal experience, they end up with about 40% of the tickets to their games with the Senators and your right they are passionate, but again it comes down to demand. Season ticket holders own about 50-55% of the tickets, so once tickets go on sale, Senators fans grab tickets to numerous games through the year. Some are Christmas gifts, team outings, birthday gifts..etc. Since demand far outstrips supply in both Montreal and Toronto, once the tickets go on sale they are snapped up by those fans. The supply and demand in this market is more relative to one another than it is in Montreal or Toronto. So a Senators fan doesn't have to drive 5 hours down the 401 to Toronto to watch their team. There is plenty supply to go around. Also, one key thing that you've missed is that Senators fans cannot drive to Toronto for a game because THERE AREN'T ANY TICKETS AVAILABLE for sale. Almost all Leafs tickets belong to season's ticket holders, so no supply is available to the general public.

One final note the average attendance so far this year is: Ottawa 19,730 (5th) and Toronto 19,324 (6th). This cannot be attributed to Leafs and Habs fans. Three of the Senators first four home games were against Florida, Washington and Pittsburgh and were all sell outs. This supports the theory that Senators fans support the team game in and game out.

[mikesmith]

Which came first...this argument or the continued dressing for attention on the front page about fan loyalty.
LOL
THIS is why we need a podcast

[williamefwilson]

I am an economist by degree (and both of our references to credentials are ad hominem attacks by the way).

Demand is more important than supply in the sense that it dictates sale prices, style, etc. You could sell 20,000 tickets in a market of 6 million people, but if no one wants them, then you are handcuffed in what you can charge for them, etc. This situation speaks to my Los Angeles, New York (Islanders) and Dallas examples. If, on the other hand, people really want the tickets, then you can charge and sell them however you want. The Leafs and Habs fall into this situation, but it also applies to some smaller teams as well. The Winnipeg Jets, for example, sell a disproportionate number of season tickets in comparison to most other teams because there was sufficient demand for season tickets (a fact exploited by the league) upon the team's return to Winnipeg.

"Small market" simply refers to the number of potential buyers that a team naturally enjoys - it does not speak directly to any other demographics/variables like income, loyalty, demand, etc. (For instance, Detroit is located in a "large market", but it is also a relatively poor market, impacting demand, ticket prices, etc.) Moreover, market size really only matters: 1) in the formative years of a team where it may be easier to penetrate and survive in a large market over the short-term; 2) during sustained losing seasons where your fan base is likely to contract; and 3) when it comes to selling secondary products like clothing (though even here market size is no guarantee of success as the Blue Jays were routinely last in secondary sales for MLB before their recent turnaround despite having one of the league's larger markets). Once a team has established itself and built a loyal fan base in the overall market, however, this smaller group of consumers becomes more important and is ultimately responsible for the team's fate. If they are extremely loyal, then you get situations like Toronto, Montreal, Winnipeg, Pittsburgh, etc. On the other hand, if they are fickel, then you get situations like Ottawa.

The problem - again - in Ottawa is demand, not supply. A metro area of 1,200,000 people is easily enough to consume 20,000 tickets at arguably any price, but it is low overall demand that dictates management's selling strategy. If demand was higher, then they could sell more season tickets. Instead, demand is higher for certain match-ups (including your mentions of Pittsburgh and Washington above), which explains generally low ticket prices and the experiment with "flex packs", differential pricing schemes, etc. You can look at Ottawa's successes and failures with AAA baseball in the same respect: enough people to fill the stadiums, but insufficient demand to keep the teams truly profitable and in Ottawa over the long-term. (Can the Senators survive long-term?)

Kansas City speaks to a failed small market team in MLB, but this is likely due to low demand because the team has not been competitve for years. Montreal encountered the same situation in a "large market", demonstrating once again that demand matters more than supply.

Here's another timely/topical example to illustrate the same general point. According to your argument, BlackBerry would be better positioned if they were active in more/larger markets. The higher the supply and the higher the pool of potential buyers, the better, right? However, BlackBerry is already available worldwide (and one of the few reasons they remain somewhat competitive is the fact they they are the only major smartphone highly active in India). Their problem is demand, not market presence. If anything, they now have too much supply. This has prompted them to create a new product and develop an agressive pricing strategy to recreate demand for their products.

The argument you present can be propely called "Bettmanonomics": larger markets equal higher demand. This logic is flawed, however, because supply and demand are independent variables that interact with each other; they are not necessarily congrument.
In short, one market may be six times larger than another market, but that does not automatically mean demand will be six times greater in the larger market as well. To argue this point, one is guilty of conflating supply and demand.

As for the salary cap, you cannot rewrite history. It was brought in to increase the level of competiton between highly profitable, profitable, barely profitable and unprofitable teams. It was not brought in on a strictly large market-small market basis. Once again, there are many teams on both sides of the market size equation that can be considered successful or unsuccessful from a profits perspective.

My brother, by the way, is also a general accountant and a Sens fan. Small market, er, world.

[mikesmith]

and both of our references to credentials are ad hominem attacks by the way).

I thought when he made the CA reference I should back away. I know Sandwiches and that is it.
:P